The S&P 500 index fell 3% last week, reaching lows not seen since March 2021 and putting it on the brink of bear-market territory, as disappointing quarterly earnings from retailers added to investors‘ concerns about the impacts of inflation on the economy.
This marks the S&P 500’s seventh consecutive week in the red. The index has only had five losing streaks that long since 1928, and hasn’t had one since an eight-week slide that ended in March 2001, according to Howard Silverblatt, senior index analyst at S&P Dow Jones Indices.
The week’s decline came as the latest quarterly reports from retailers including Walmart (WMT) and Target (TGT) showed negative impacts from inflation digging into earnings results.
Walmart lowered its fiscal 2023 profit outlook after reporting weaker-than-expected fiscal Q1 adjusted earnings per share amid supply chain disruptions, increased costs and persistent inflationary pressures, mainly on food and fuel.
Target, meanwhile, reported Q1 adjusted earnings per share below analysts’ expectations amid what CEO Brian Cornell described as “unexpectedly high costs.”
Most sectors were in the red for the week. Consumer stocks had the largest declines of the week, with consumer staples down 8.6% and consumer discretionary down 7.4%. Technology fell 3.8%, industrials shed 3.7% and communication services lost 3%. Other decliners included real estate, financials and materials.
Three sectors posted gains last week but the gains were slight. Energy rose 1.1%, health care edged up 0.9% and utilities eked out a 0.4% increase.
Looking ahead, inflation data will be in focus next week as April inflation figures are due to be released on Friday. Next week will also feature housing data, with April new home sales due Tuesday and April pending home sales due Thursday. Other data will include April durable goods orders on Wednesday and revised Q1 gross domestic product on Thursday.
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